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March 12, 2009

Join the Federal Knowledge Management Initiative & Federal KM Working Group

Join the Federal Knowledge Management Initiative & Federal KM Working Group

America faces critical challenges today (information overload, brain drain in government, sharing knowledge, automating knowledge, making laws easier to understand, etc.) and enormous opportunities in the years ahead.

I truly believe KM is part of the solution that can help us overcome the challenges and seize the opportunities.

Government and private sector KM executives have united and formed the Federal Knowledge Management Initative to convince our leaders in Congress and the Obama Administration to coordinate, formalize, and centralize America's efforts around knowledge management.

This presentation by Neil Olonoff summarizes the "Federal Knowledge Management Initiative Roadmap." The initiative, begun several months ago by members of the Federal Knowledge Management Working Group, aims to establish an official center for knowledge management in the Federal Government. With this center of operations as a start, the Federal government can begin to foster knowledge sharing practices and culture, build innovation, and find solutions to the Knowledge Retention Crisis. And there is much more to the plan. Learn how you can become a part of this exciting, ambitious new direction for knowledge management in Government, by attending via phone and computer.

Download Federal Knowledge Management Initiative PPT

Join the Federal KM Working Group. No dues are involved. To join the listserv, send a blank e-mail to kmgov-subscribe@list.jpl.nasa.gov

Read the Roadmap on their Wiki page:

http://www.km.gov

February 04, 2009

WARNING: CEO's need to wise up and "bail out" of billion dollar IT projects right now

WARNING: CEO's need to wise up and "bail out" of billion dollar IT projects right now

Dear CEO: 

I am sick and tired of reading about billion dollar IT projects that we both know are never going to work, change, or last. It's time to stop the non-sense and use common-sense.

Here's just one example from InformationWeek. California is spending $3,600,000,000 (that's $3.6 BILLION) on these systems:

• Financial system: 11.8 years, $1.6B
• Strategic Offender System: 5.7 years, $416M
• Home Support Services: 10 years, $298M
• Automated Welfare System: 3.8 years, $263M
• Child Welfare System: 7.3 years, $254M
• Motor Vehicles IT Modernization: 6.8 years, $207M
• Consolidate IT Infrastructure: 2.9 years, $191M
• HR System: 6.1 years, $179M
• ERP for Prisons: 4.5 years, $176M 

Do you really want to cut your systems development budget?

Here's how:

Let's say you're planning an 18-month $18 million systems development project. Imagine that's the cost and time for analysis, design, programming, testing, and deployment.

Using business rules, rulebases, rulebased technology, and architecture and engineering principles, we can program that system in 12 months and $12 million. It's that easy.

We can save you 6 months and $6 million just by using rule-based programming languages instead of hard-coding your rules.

If you can tell us exactly what all your business requirements are, and how many business rules you have, well then we can bring your costs down even more.

We can find enough good qualifed experienced out of work programmers right now who are just as cost-effective and as productive as any programmer in any country who would love to work on your project. And they're ready to start as soon as you're ready to save $$$.

When do you want to start saving millions of dollars?

Hurry, you must act now. Call 1-800-SAVE. The first 50 callers will save an additonal $1 million if you call in the next 30 days. You must call before shareholders find out how much you're really spending on systems development.

PS - By the way, for every $1 billion you spend on development, you're spending $5 billion on maintenance. It's time to stop IT non-sense. You must call now!

December 12, 2008

Agility Alliance - New open social network connects technology gurus and business masterminds

Agility Alliance - New open social network connects technology gurus and business masterminds

I’d like to reach out and invite all my IT/business friends to join the Agility Alliance, a free online network that helps bring together technology experts and business leaders:

http://www.agilityalliance.org     

The Agility Alliance network is an open social network, for experts, by experts. We’d like to keep it technical, friendly, open, fun, and non-commercial (i.e. no marketeering).

If you are into BRM, BRMS, BPM, BPMS, CRM, SCM, EDM, CEP, etc. there is a group for you. If not, create a group! It's flexbile so you can create your own group, blog, or forum to share with all of us.

If you're a programmer, analyst, designer, architect, engineer, business executive, VP, CTO, or CIO, and you are a leader in your field, or you want to hear what the leading minds in these fields have to say, join the network and become a member of your favorite group.

I hope this network becomes a place to share great ideas, learn from the best, and find "the best of" links to blogs, presentations, videos, and discussions in your favorite topics. Mine, as many of you know, are managing rules and knowledge.

What do you know? Share... Show and tell. This is not the place to sell.

It’s pretty open and flexible, so you can add groups, blogs, photos, slides, videos, chat, links, forums, tutorials, articles, etc. There are individual pages each member can customize, and each member gets his/her own blog (if you want it). You can post articles, templates, links, and add discussions to the forum. Invite your friends and colleagues to join. If you can’t figure out how it works, ask your kids!

Two months ago the idea of building a professional network for rulebase experts and knowledgebase exeprts was first proposed at ORF2008. I loved the idea. I started creating it, but it didn't feel right. Something was missing.

A big problem in our field is that business people talk dollars and IT people talk data. Alignment, or lack thereof is the biggest complaint CIO's have had for years.

Creating a closed network for just the top rule experts in the world was an awesome challenge, but I also wanted CIOs to have access and see what these genuises have to say. Business people need to hear what geeks have to say.

Geeks landed us on the moon; But business people paved the path and led the way.

We all need to bridge the gap between business and technology. I am extremely confident that the Agility Alliance network will help connect business and IT experts.

The time is right to create a network of IT experts and business leaders. The network is just a few days old, so this is just a start.

The rest is up to you.

 

September 25, 2008

Ten Rules for Wall Street

Ten Rules for Wall Street

What are the rules? Did people break the rules, bend the rules, or ignore the rules?

Confidence in Wall Street went down the drain last week. The credit crisis gave business a bad name, and it gave government a bad name for not doing anything about it. Trust disappeared. 

It's time to rebuild trust in business and government.

Here are ten rules for restoring trust in business and government. These rules apply to everything from the global financial system, to Wall Street; from federal governments to local jurisdictions; from global corporations, to organizations and small businesses.

Companies that learn to define transparent rules that are sensible, consistent, easy to understand, and easy to follow will be easy trust. On the other hand, companies that rely on opaque rules that are complicated, confusing, illogical, inconsistent, or deceptive will be hard to trust. They will go out of business.

Rule 10 - Have guiding principles. Act on principles, independent of influence by greed or friends.

Rule 9 - Follow policies and guidelines about what is permissible and what will not be tolerated.

Rule 8 - Establish rules of behavior concerning what is right and wrong. Success in business depends on understanding the rules. The rules of the business are the way the business really operates. Design transparent rules that are logical, sensible, easy to understand, and easy to follow.

Rule 7 - Leverage knowledge and judgment. Know what you know, and know what you don't know. Document and retain what your experts know and how they think so their knowledge can be shared with those who need to know. Use wise judgment. Know when to follow the rules, when to bend them, and when to forget them.

Rule 6 - Make smart decisions informed by facts, rules, knowledge, principles, and judgment. Decide using clear, logical, and unbiased rules that explain each decision clearly. Use sound reasoning to make rules-based, principles-based, and knowledge-based decisions.

Rule 5 - Create enterprise architecture to deal with change and complexity. Use architecture to simplify complexity, and to understand how the whole business and the whole system works; Understand who, what, when, where, why, and how. Design the architecture to ensure that all the parts fit (interoperability), connect (integration), work (quality), work as intended (alignment), last (reliability), and can be shared (reusability). Design the architecture so the business can handle increases in complexity and increases in the rate of change (flexibility). Design the architecture to reduce time-to-market and reduce operating costs. Design the architecture to support rules-based and principles-based compliance.

Rule 4 - Do the engineering, to design systems that work, change, and last. Apply architecture and engineering design principles to ensure alignment, flexibility, quality, interoperability, integration, reusability, reliability, compliance, reduced time-to-market, and reduced costs. Build in risk management safety factors so the business and the systems can handle extreme stresses and excessive loads.

Rule 3 - Have a clear vision. Stand for brand.

Rule 2 - Instill confidence. Improve the quality, consistency, and accuracy of decisions and actions.

Rule 1 - Build trust. Align actions, decisions, and transactions with management's intentions. Align execution to goals, strategy, and mission. Align systems to business. Align implementation to intention.

Sept. 25, 2008   Rolando Hernandez   BIZRULES

Principles are Coming

Principles are Coming

More judgment and knowledge needed

While the finance industry is moving toward more rules and exceptions, and rules-based regulation, financial accounting and reporting is moving in the opposite direction, towards fewer rules and exceptions. Accounting and tax is moving towards more principles-based regulation.

The US is moving away from GAAP (Generally Accepted Accounting Principles) and towards IFRS (International Financial Reporting Standards). IFRS is the reporting framework used by most of the world today, and it has growing support in the US. IFRS relies on professional judgment rather than detailed rules. Under this principle-based approach, management will have a mandate and obligation to exercise its own best judgment when making decisions.

Companies will need to implement systems that use knowledge and judgment to make principle-based decisions.

It is time to adopt knowledgebase technology and knowledge management. It's time to build knowledge bases and embed knowledgebased technology into operations and existing systems.

Knowledgebased systems that are engineered and architected properly can

  • follow principles and guidelines
  • automate management's best judgment
  • ensure compliance
  • and deliver trust. These expert systems can be trusted because they use expert judgment to make the same decisions top experts would make, thus improving the quality, accuracy, and consistency of decision-making.

I don't believe there is any other practical or proven way of automating human judgment, other than building intelligent, knowledge-based systems.

Knowledgebased systems are the solution for principle-based compliance.

Rules are Coming

Rules are Coming 

More rules and regulations are coming

To restore trust in the financial system, the government is moving towards more rules and exceptions, and more rules-based regulation. The trend towards de-regulation is over. Regulatory reform is coming back. That means more rules and regulations than ever before.
 
Management will have an obligation to follow the rules and laws when making decisions. These decisions better be consistent, correct, complete, and compliant if you really want to stay in business. 

Companies will need to implement systems that follow the rules and make rule-based decisions.

It's time to adopt the business rules approach and business rules management. It's time to build rulebases and embed rulebase technology into operations and existing systems.

Rulebased systems that are engineered and architected properly:

  • follow the rules
  • automate management's decisions
  • ensure compliance
  • and deliver trust. Rule engines can be trusted because they implement the decisions management intended.

Rulebased systems and business rules management are the solution for rule-based-compliance.

Sept. 2008 credit crisis

On Sept. 10, the world's largest particle collider and atom smasher was turned on for the first time. Skeptics warned that the Large Hadron Collider, a 17-mile circular tunnel under the Swiss-French border designed to smash protons so they shatter and recreate the Big Bang, would create a black hole inside the Earth. 

In a world where homes could go down the drain and disappear into a black hole, the mortgage mess and global credit crisis seemed trivial in comparison.

Four days later, on Monday Sept. 15, the credit collider smashed Lehman Brothers to bits. Lehman filed for bankruptcy and instantly disappeared into the credit black hole. 

By Thursday Sept. 18, the black hole threatened to collide and smash U.S. financial markets and the entire global financial system. Then the federal government stepped in and turned off the collider with a $700 billion proposal for the largest bailout plan in U.S. history. 

One week later, on Thursday Sept. 25, the plan is still up in the air. Congress is debating the plan. President Bush just met with Sen. McCain and Sen. Obama. The world is rapidly losing trust in the U.S. German Finance Minister Peer Steinbrueck said "The United States will lose its superpower status in the world financial system. The world financial system will become more multipolar," he said.

Thursday night, Washington Mutual disappeared into the black hole, becoming the biggest bank failure in U.S. history. The government seized WaMu, took it over, and sold Wamu's $307 billion of assets to J.P. Morgan Chase for $1.9 billion.

"A crisis of confidence without precedent is shaking the global economy," French President Nicolas Sarkozy said in a speech in Toulon, France.

Toulon is close to the Large Hedron Collider, where this whole thing started. Could someone forward this message to President Sarkozy: Please shut down the collider!

 

Here are some photos inside the LHC tunnel, and in the control room on LHC First Beam Day:

LHC mission control  LHC atom smasher

LHC operators  LHC monitors

Images by Maximilien Brice    copyright CERN

 

March 13, 2008

Visible Knowledge LLC helps companies prevent Brain Drain

10,000 baby boomers are retiring today.

10,000 more will retire next Monday. And Tuesday. And so on. That's the way it's going to be for the next 20 years. Key personnel and subject matter experts with 20 to 30 years of experience are going to clear their desk and head down to Florida. As they walk out the door, invaluable corporate knowledge will simply disappear.

Intellectual capital, a vital corporate asset, will melt away unless companies do something to stop the brain drain and to retain critical knowledge.

Visible Knowledge LLC (www.visibleknowledge.com) has a solution:

  • An interactive RuleMap™ that models business rules & simulates business logic
  • An interactive Expertise Blueprint™ that transforms knowledge into Visible Knowledge™
  • A Legacy Interview(sm) 

Visible Knowledge helps companies retain vital corporate knowledge before it melts away. They focus on documenting invaluable critical knowledge from your top domain experts and key personnel, before they retire. It can take companies years and millions of dollars to recover from losing this type of knowledge.

A traditional exit interview is just not enough when you're dealing with subject matter experts or super experts. So Visible Knowledge has developed a Legacy Interview(sm) process that extracts and documents critical knowledge before experts leave or retire. They use a rapid knowledge acquisition process to extract maximum amount of knowledge in a minimum amount of time. Visible Knowledge focuses on capturing critical knowledge.

If Know It All Ken just gave you two weeks notice, and he's the only one who knows how to fix the $5 million widget making machine, Visible Knowledge can help. They can spend a few days with Ken and document the crucial knowledge you need to keep the business running.  

If Super Expert Sally is retiring in a few months, Visible Knowledge can spend a few weeks with her to elicit as much vital and critical knowledge as possible before she leaves.

If your entire Dept of Super Experts is retiring next year, Visible Knowledge can work with your team over the next few months or years to document the critical knowledge you need to retain.

Later, if you need to automate the knowledge that was captured and retained, companies like BIZRULES can help you do that. BIZRULES works with leading knowledge software vendors to design and build knowledge-based and rule-based solutions.

April 04, 2007

BIZRULES #1 Hits: Critical challenges facing businesses today

If networks run repeats, then bloggers can too. So this week I'm reprinting a popular article that is getting lots of hits on Google, in a shameless effort to keep that article #1 on Google:

Critical Challenges Facing Business and IT Today, Sep. 8, 2005, BIZRULES Blog

If you enter those words into Google, that article shows up as #1. Here are the stats as of now:

I didn't realize this was such a popular topic. If you'd like to add or suggest other critical challenges to add to the list, please add your comments to that article.

March 16, 2007

Best Buy, Bogus Prices: Confusion about pricing rules reveals need for business rules management

If employees don’t know, don’t understand, or don’t care what the rules are, you have a business rules problem.

If customers get different answers depending on who they talk to, you have a business rules problem.

If salespeople can decide whether to charge the right price or a bogus price, you have a business rules problem.

Best Buy, the nation's largest electronics retailer, has a business rules problem.

It's also dealing with a public relations nightmare, and an investigation by the Connecticut Attorney General's Office.

Pricing rules used by salespeople in Best Buy stores are inconsistent and contrary to Best Buy pricing policies established in the boardroom. “What we've learned very quickly is we have not been clear enough in communicating to our employees the policy, and how to execute it in our stores,” said Dawn Bryant, spokeswoman for Best Buy.

Success in the world of business depends on understanding the rules,” I said recently during a panel discussion on Sarbanes-Oxley compliance.

“You need to know the internal rules and policies of your business. You have to comply with the external rules and regulations that govern your business, industry, and function. Your company must ensure that rules are followed. Your company must enforce the rules. Your company must give staff tools to help them follow the rules, make legal decisions, and prevent them from making illegal decisions. Business rule management systems (BRMS) and business rule engines (BRE) help companies comply with rules and regulations like SOX.

If you don’t have a rule engine that automatically prevents employees from breaking the rules and instantly detects and prevents fraud, you’re out of the game. You’ll end up watching your stock go from $30 to $3 during lunch. You lose. You’re out of business.

Smart companies are using business rules to ensure compliance with rules, to enforce rules, to increase agility so they can change faster, to prevent business mistakes, and to reduce IT system development costs by changing rules in days not months.

Business rules technology helps business comply with rules and regulations, helps employees follow the rules, and prevents employees from breaking the rules (either accidentally or on purpose).”

Business rules management is the prescription for business rules problems. Business rules management entails everything from the business rules approach to business rules technology. 

The business rules approach helps companies transform complex policies into easy to understand business rules. What better way is there to clearly describe and communicate policies and business rules to employees?

Business rules technology helps companies execute the right business rules at the right time every time. What better technology is there to automate business rules?

What happened at Best Buy is a great example of what can go wrong when business rules are not designed and engineered properly.

Business rules are like the glue that holds together all the parts of the corporation. Business rules integrate and align all the moving parts of the corporation. With business rules management, Best Buy can ensure that rules and processes used in the stores are aligned with Best Buy pricing policies defined in the boardroom.

Without business rules management to connect the elements of the corporation, the only way to ensure the corporation works as intended is to "hope and pray," as John Zachman likes to say. With weak or wrong business rules, the corporation falls down like a house of cards.

This is why business rules management is vital to the corporation.

Business rules management is not just about documenting business rules, defining who the owners are, and deciding who is authorized to change them. It’s not just about using rule-based languages to speed up system development instead of hard-wiring rules in legacy code. It’s not just about selecting a business rules engine. It’s not just about understanding the company’s strategies, policies and business practices, and then transforming those objectives into rulebooks, descriptive business rule models, IT specifications, and finally into automated systems.

Business rules management is also concerned with architecting and engineering the business rules so they are integrated with the rest of the business. This helps ensure that the implemented business rules that are in actual use, whether automated or manual, align with the governing rules and strategies of the business.

What happened at Best Buy?

At first, I thought the Best Buy pricing problem was complicated and hard to explain. Then I wondered how can business rules help solve this problem? What would BIZRULES do if Best Buy came to us for help?

That’s easy. I like to draw pictures to simplify complex ideas. By removing the complexity, pictures help me make even the most complex concepts easy to understand:

BIZRULES Analysis of Best Buy Pricing Rules 

(Click to see medium or large slide)

This is an example of three business rules that were apparently in operation at Best Buy when this story broke. Of course, we really don't know the rules were, so this is just a good guess based on published news accounts of what really happened.

Along with a picture of the rules, this slide shows how the rules affect the rest of the company. It also shows how the rules satisfy business rules management objectives, and business rule engineering design objectives:

Rule #1 is a conceptual explanation of the pricing policy to honor the lowest price.

  • This rule tells us what management means and what their intentions are.

Rule #2 is a logical description of the corporate policy to honor the lowest price:

  • This business rule clearly shows alignment to corporate strategy.

  • This is the high quality rule prescribed by the pricing strategy.

  • This rule shows integration between online and retail stores.

  • This rule offers reusability – the same rule can be implemented online and in the store.

  • This rule shows transparency.

  • This rule reduces operations costs because it’s easy to follow.

  • This rule demonstrates regulatory compliance.

  • This picture is worth a thousand words.

  • This rule builds Customer Trust Management.

  • This is a “Best Buy” type of rule.

  • This rule is easy to approve, assess, test, and certify.

  • This rule improves governance and controllership.

Rule #3 is used (i.e. prescribed) by some salesman to mislead customers into paying higher prices:

  • This business rule is clearly not aligned to corporate strategy.

  • This poor quality rule is operational and being used in stores.

  • This rule shows discontinuity and inconsistency between online and retail stores.

  • This store rule cannot be reused online because it lacks transparency.

  • This rule increases operations costs because it’s hard to explain and justify.

  • This rule raises questions about regulatory compliance.

  • You need a thousand words to explain this picture.

  • This rule destroys customer confidence and trust.

  • This rule is public relations nightmare.

  • This rule may be illegal.

  • This is a “bait & switch” type of rule.

  • This rule should never have been approved.

  • This rule raises questions about whether proper rules, processes, and controls are in place.


Now that I understand what the current pricing situation at Best Buy is, it seems pretty straightforward:

  • Management intention is Rule #1. This is Best Buy’s pricing policy.
  • Marketing description is Rule #2. This is what marketing thinks is happening.
  • Sales prescription is Rule #3. This is what salespeople are actually doing.
  • IT specification is not applicable in this example because these rules have not been automated. If these rules were automated, an executable specification of the rule (i.e. pseudo code) may need to be developed for the programmer.


These four views of the business rules fit nicely into an Enterprise Rules Architecture.

The next step is to fit these rules into an enterprise architecture framework. I used John Zachman’s influential and compelling Framework for Enterprise Architecture as an example:

The Zachman Framework for Enterprise Architecture

(Click to see medium or large slide)

Next, I overlaid Best Buy Rules #1-3 on top of Zachman’s Enterprise Architecture Framework to add more clarity to the Best Buy pricing situation:

BIZRULES Analysis of Best Buy Pricing Rules (part 2)

 (Click to see medium or large slide)

The pricing problem at Best Buy is that the business rule used by salespeople in the stores contradicts the company’s pricing policy. Clearly Rule #3 is not aligned with Rule #1 or Rule #2.
Business rules confusion is what caused the problem.

Business rules management is the solution.

To get out of this sticky mess, Best Buy needs to:
  • establish or improve their business rules management.
  • prevent salespeople from using Rule #3 immediately
  • mandate use of Rule #2 immediately.
  • automate Rule #2 as soon as possible. Why let salespeople decide pricing at all? Let the computer figure out what the lowest price is.
  • use a business rule engine to automate this rule as quickly as possible. This rule change needs to happen overnight. But changing hard-wired rules in code takes take days or weeks. Often, companies that don’t use rule engines take months to change business rules as simple as these. This is one reason why companies buy rule engines: Changing rules in a rule engine takes minutes.
  • educate salespeople on the pricing rules. Of course, if Best Buy automated the rules using a rule engine, they wouldn’t need to train as much.
  • ensure compliance with these rules from now on.
What about the secret website?

Business rules can also help Best Buy get rid of the secret and duplicate website. It's hard enough to maintain and manage prices for thousands of products on one website, let alone two. There are costs associated with maintaining a duplicate site containing 250,000 pages; surely management and shareholders want to reduce redundant costs like these. One way is to use a business rule engine to eliminate the duplicate site and duplicate effort. Why not write a few rules to show different prices (if that really is management’s objective) depending on whether the salesman pulls up the web pages on the Internet or the "secret website" on the Intranet?

How else can business rules management and business rules technology help Best Buy? Please comment and let me know.

Rolando Hernandez

CEO & Chief Rules Architect, BIZRULES

 

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March 14, 2007

New Power for Management: Business Rules

Understanding and managing business rules is vital to the corporation. It is just as important as managing people, processes, and information.

Nevertheless, business rules are often misunderstood and poorly managed.

Many rules remain unwritten – they are known only to and retained by subject matter experts who sooner or later leave the corporation, causing brain drain. When business rules are written, they are seldom shared and reused throughout the corporation, which increases operating costs. When business rules are automated, they may not be aligned to the business strategies and policies, leading to quality problems.

In order to program business rules, programmers often rely on unclear business rule specifications that are incomplete or incorrect. Then they usually hard-wire the business rules in computer languages that only programmers can understand and change.

Because programmers are not directly involved in the day-to-day operation of the business, they often make assumptions about what the rules are and what management intended. That leads to mistakes or bugs in the programs, which requires further programming and re-programming.

There is a solution.

Some corporations use advanced business rules technology and business rule management methods to take business rules out of IT and bring them back into the business. Now management can finally manage and change their business rules.

Business rules management techniques help management clearly describe and communicate business rules to employees, partners, and customers. Business rule management software helps automate the rules that should be rule-based.

Business rules improve the condition of the corporation. They prevent business mistakes and minimize risk. They solve many critical problems facing business and IT.

Business rules are like the glue that holds together all the parts of the corporation, ensuring that the automated rules align with goals and strategies.

Business rules integrate and align all the moving parts of the corporation into a cohesive enterprise architecture and operating system that works, changes, and lasts.

Business rules give new power to management.

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October 19, 2006

Microsoft Rules 1.0 for MS Office

I discovered David Strommer's blog about .Net and Enterprise Architecture recently.

One post caught my eye, Microsoft Rules 1.0 for MS Office, which is about a story called Rules 1.0 that I wrote about Rulebase Management Systems. David's quote is spot on:
"One of the most difficult challenges of any application development effort is accurately capturing the business processes and rules." - - David Strommer

Well said. Thanks David.

July 05, 2006

Productivity of the Mind

In a recent issue of Chief Executive* magazine, Editor in Chief J.P. Donlon had this to say about the value of knowledge management:
The single greatest challenge facing CEOs is to raise the productivity of knowledge throughout the enterprise. It is an economic truth that real earnings and real incomes cannot be higher than productivity for any length of time. And knowledge and insight into customer behavior—as opposed to mere information—is the fuel that propels innovativeness.
Wow! I am glad to see an influential business magazine make the point that knowledge, not "mere" information, is the key to productivity, earnings, and incomes. This is exactly what CEOs need to know, and chances are they've read this*. I'm not sure I would say that managing knowledge and raising the productivity of knowledge is the single greatest challenge facing CEOs, but I would certainly say that it is among the top challenges CEOs face. I've been making a similar point for years, that:

Real and lasting competitive edge comes from managing knowledge, not just managing information.

I also like J.P. Donlon's analogy, but I'd like to take it one step further:

If knowledge is the fuel that propels innovativeness, then inference engines and rule engines are the engines that burn the fuel, automate the knowledge, and fire the rules that drive the business.

Rule engines/inference engines are the most effective and most efficient ways to automate knowledge and business rules. Is there any doubt left that every enterprise that wants to compete and innovate and win in today's knowledge-based economy needs a rule engine/inference engine?

*
About Chief Executive

Chief Executive
is the only magazine written strictly for CEOs and their peers. As the leading source of intelligence for and about CEOs, it provides ideas, strategies and tactics for top executive leaders seeking to build more effective organizations... The readers of Chief Executive include the world's most influential leaders - the CEOs of major corporations around the globe...

February 10, 2006

Rules 1.0

Executives used to have secretaries. Now they have Word.

Companies used to have IT/Finance modelers to do "what if" analysis. Now they have Excel.

Newspapers used to have strippers (no not that kind!) that did page layout by hand. Now they have PageMaker.

In the early days of the Web, you needed a Webmaster to create your website. Now you have FrontPage.

What's missing today in the business rules market is a tool that lets business executives write their own rules. Without IT, without programming, and maybe even without automation. Just a tool like Word (for textual rules), Excel (for decision tables), or even Visio (for decision trees) that simply lets me document "logical business rules". And then press File, Save as... "billing rules model 1.0", or "audit rules 1.0", etc. That's what I want to be able to do.

Sure, I'd like to push a button and have that logical rule model artifact go into a business rules repository. Great. If I could push another button and have my logical rule model generate code for whatever Business Rule Engine I'd like to target, now we're talking business rules.

That is the promise of business rules. I want to create a logical rule model, select my technology (i.e. HaleyRules, ILOG, PegaRULES, Versata, Fair Isaac Blaze Advisor, CA AION, Corticon, OpenRules, etc.) and then press GO. I want the tool to transform my logical business rule model into a physical business rule model. Then I want to compile and run.

That sounds farfetched, but I think it's only a year or two away. By the way, this is the same thing that database people do for a living. ERWin anyone? Create a logical database model, select your target physical databse model technology (i.e. SQLServer, DB2, INGRES, etc.), then press GO. This approach works for databases. It is inevitable that this approach will one day soon work for rulebases.

Let's start by calling the BRMS (business rule management system) a RBMS (rulebase management system) instead. Then we should call the business rules repository the rulebase. Business people will find it much easier to understand rulebases if they can compare it to the familiar database analogy.

We'll still need industrial strength rulebases like the ones I mentioned above. But we'll also need a "lite" rulebase software tool for business executives. Think Word, Excel, Visio.... or Access instead of SQLServer...

What if, or when will Microsoft or some other BRE vendor releases Rules 1.0? How about Microsoft Rules 1.0.? Maybe part of Office? What if executives finally have a tool on their desktop to write the rules? A tool that understands IF and THEN and ELSE and MUST and ONLY IF and MUST NOT etc.

I think a lot of business people have been led to believe that that's what business rules will mean to them. And their expectations are that the rule tool will be as easy to use as Excel or Word. I've noticed more and more companies approving business rule projects where the business people have the expectation that the business rules tool is something they can fire up on their PC... as easily as they do Word or Excel.

Business Rule Engine software products are clearly awesome productivity tools for programmers. But only a few of them could be considered tools for executives. We need to think of the BRE as the tool for IT developers and for rule execution, and the logical rule modeling tool I described above as the rule documentation tool for business executives.

I hope there are some companies working on this idea of a logical rules modeling tool that generates code for my BRE tool of choice.

Stay tuned... What do you think? Does Microsoft Rule? Anyone else?

September 08, 2005

Critical Challenges Facing Business and IT Today

I was looking through some presentations I gave five years ago and found a list of critical challenges facing Business and IT. These problems could be solved using a business rules approach and BR technology. I'm afraid many companies that haven't climbed aboard the business rules train still face many of these challenges today.

Now that I'm blogging, I thought it would be a good idea to "externalize" this list and make it available on the Web. I'd like to keep adding to this list over time. And of course I welcome your suggestions or additions.

Critical Challenges Facing Business Today

  • Compliance with external regulations/laws and with internal policies/rules
  • Ability to change business rules instantly
  • Managing knowledge
  • Managing business rules
  • Re-engineering and simplifying business rules and business processes
  • Product development time to market
  • Application development time to market

Critical Challenges Facing IT Today

  • Dealing with rapid business change and increasing complexity
  • Time to market
  • Increasingly complex business rules
  • Changing or adding business logic can break existing logic
  • Business rules aren't properly documented
  • Business logic duplicated across systems
  • Building flexible systems that can support unknown future requirements.
  • Many systems today limit what the business can do
  • We don’t know the rules in our systems, yet these systems run the business
  • Existing rules may actually be inherited system constraints
  • Different IT units document business rules differently, if at all
  • Business people speak business rules, yet IT speaks data and code
  • Managing knowledge, especially business rules

The business rules approach and business rules technology can help solve each of these problems.

July 02, 2005

Famous Quotes (about resistence to change and predicting the future)

I am reminded of these quotes every time I talk to someone who believes that rulebases, knowledgebases, and expert systems are a fad...

"The telephone has too many shortcomings to be seriously considered as a means of communication.”
Western Union internal memo, 1876

"The Americans have need of the telephone, but we do not. We have plenty of messenger boys."
Sir William Preece, chief engineer of the British Post Office, 1876 *

"Drill for Oil? You mean drill in the ground to try and find oil? You're crazy."
Response reported by Edwin Drake as he tried to hire workmen who knew oil just bubbled out of the ground, 1895 *

"Everything that can be invented has been invented.”
Charles H. Duell, Commissioner, U.S. Office of Patents, 1899

"It must be accepted as a principle that the rifle, effective as it is, cannot replace the effect produced by the speed of the horse, the magnetism of the charge and the terror of cold steel."
British Cavalry Training Manual, 1907 *

"Airplanes are interesting toys but of no military value."
Marshal Ferdinand Foch (who become the supreme allied commander in World War I), 1911 *

"The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?"
David Sarnoff's associates in response to his urgings for investment in the radio in the 1920s.

“Who the hell wants to hear actors talk?"
H.M. Warner, Warner Brothers, 1927

"I think there is a world market for maybe five computers."
Thomas Watson, chairman of IBM, 1949 *

“Computers in the future may weigh no more than 1.5 tons.”
Popular Mechanics, 1949

"I have travelled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year."
Editor in charge of business books for Prentice Hall, 1957 *

"We don't like their sound and guitar music is on the way out."
Decca records rejects the Beatles, 1962 *

"There is no reason in the world anyone would want a computer in their home. No reason.”
Ken Olsen, Chairman, DEC, 1977

"I believe OS/2 is destined to be the most important operating system, and possibly program, of all time.”
Bill Gates 11/87

"640K of RAM ought to be enough for anybody.”
Bill Gates, 1981

"The best way to predict the future is to invent it”
Alan Kay

* Thanks to Jocelyn Paine for these quotes:

June 10, 2005

It's Too Good to be True

A short time ago one of our Knowledge Engineers went to a Business Rule Engine software vendor training course with IT People and Business People from one our clients.

Surprise! The client's business people loved the rule engine software (BRE #1) because they could write rules in an English-like language. The client's IT people didn't like it as much because they could write rules in an English-like language. It had something to do with, uh, you know, hey, if we actually used this thing we wouldn't need some of our IT business analysts because the tool is so good that the Subject Matter Experts / Domain Experts could author the rules themselves without IT Business Analysts... And if we ever figured how to really use this engine, we may not need some of our IT Programmers either... (See: "the usual suspects")

So, the client decided to use another BRE software package (BRE #2) that:
  • Required the larger IT infrastructure investment and ongoing IT support that this client was used to

  • Didn't have as "English-like" a language. Because it was more like a typical "programming language", it would be eaiser to the IT People to learn

  • The rules were written in a "Java-like" language that IT People understood better
BRE #2 tool enabled Business People to write their own rules just like BRE #1. It opened up some of their simpler rules so they could be authored by Business People instead of IT Programmers. The more complex rules will still require IT assistance. The Business People believe they will be able to write most of the rules themselves (without IT) using this powerful tool. The IT People see it diferently - they believe that the most of the rules will require some IT support, or that the Business People will call and ask IT to write the rules for them. Time will tell how this plays out.

Now both the Business and IT are happy. BRE tool vendor #2 is happy. BRE tool vendor #1 is not - They lost this sale because their tool was too good to be true.

What's wrong with Business Rule Engines and Expert Systems?

One of the biggest obstacles we face in the Business Rule Management industry is that rule engine/expert system software tools are "that good".

  • Some companies just can't believe all the "claims" that we (the BR software vendors and BR consulting firms) make, so they go away and don't buy. They think our "claims" are "hype".

  • Some companies do believe all the claims and immediately see the power and value that Business Rule Engines and Expert Systems can add. Then the IT side realizes that "business people writing rules" really means "IT people don't have to". So all too often some IT People raise technology issues and concerns such as Top 10 Reasons Why We Should Not Manage Business Rules or use Business Rule Engines that slow down or derail the whole effort.

  • Some companies that have figured out how to "do rules right" and really leverage BRE/ES technology get so much value out of it that they just don't want to talk about it. Some clients don't want to stake a "claim" - - they prefer to stay under the radar and keep firing away (no pun intended) at their competition. If you had a secret competitive edge, would you tell your competition? (See: "Expert systems didn't really go away. They went undercover.")

So even though there are lots of BRE software vendors and a few visionary niche methodology/consulting vendors that Gartner calls "Satellite Methodology Vendors" like BIZRULES.COM (shameless plug!), one of the challenges we face is that our solutions and technologies are "so good" that clients won't tell, and potential clients won't believe.

For 20 years, people in this industry have been trying to solve this problem. I wish I knew the answer.

Top 10 Reasons Why We Should Not Manage Business Rules or use Business Rule Engines

Here is a list of what I call "the usual suspects" - - These are the quotes that you will hear many IT People say when someone proposes the idea of using a rule engine instead of hard-coding or hard-wiring rules.

The Proposer sees the rule engine as a way to increase IT productivity, improve time to market, and reduce IT costs.

The "Old IT" People see the rule engine as a threat because it means they won't have to write as much code. Less code to write means less money to make.

The "New IT" People see the rule engine as an opportunity because it means they won't have to write as much code. This will give them more time to do more higher value-added work.

So listen up next time someone suggests using a rule engine in your company: See if you can tell from the response and feedback who gets the "New IT" of the 21st Century, and who is still stuck in the "Old IT" of the 20th Century?

10. "This is different." - - I agree, yes, traditional procedural applications are quite different from declarative rule-based applications

9. "This is not how we build traditional procedural-IT systems around here."

8. "This is not the way we hard-code or "hard-wire" our rules in our systems."

7. "If we use a rule engine, we may not need as many IT business analysts." - - This is a fact. Subject Matter Experts and other Business People may indeed be able to author the rules themselves, without IT Business Analysts

6. "And if we really learn how use this rule engine well, we may not need as many IT Programmers either..." - - This is a fact

7. It's not object oriented." - - This is wrong on multiple levels. First of all, object oriented programming systems evolved from A.I. and expert systems research labs. The earliest inference engines and expert systems were actually among the first (if not the first) computer programs that were truly object oriented. Remember SmallTalk?

6. "The inference engine will be too slow." - - This is wrong. This statement may be made by somebody who has experience working on expert system projects back in 1985. Everything was slow back then. Inferencing is a lot like thinking - It's hard work! Remember, PC's were running at 10 or 20 MHz back then. Inference engines run fine on my 3 GHZ PC in 2005.

5. "It'll never work." - - Some people just don't get it. They cannot deal with change. Lots of very smart people say things like that, and they turn out to be dead wrong. See Famous Quotes

4. "We tried that years ago, but it was too slow." - - See #6

3. "This rule engine adds one more layer for our programs to deal with." - - Technically, you may be right. However, did you stop to consider how many layers of legacy rule code you will be able to get rid of once the way you throw out all the spaghetti-code rules logic and put the rules in a rulebase (aka rule engine) instead? Getting rid of all that "hard-wiring" is probably going to eliminate about 23.5 layers of junk. So, yes, I agree with you on this one: Using the rule engine will add "one more layer". Let's call it the "business logic layer" or the "knowledge layer"

2. "Our rules are too complex for a rule engine." - - Every time I hear this claim, my jaw drops, then I go speechless. After a few seconds, I will explain the fact that the more complex your business rules are, the more you need a rule engine. This is usually the right moment to bring up the RETE algorithm and discuss how it scales and handles more rules without degrading.

1. "We'll just write our own rule engine." - - This is usually the last gasp. Once all the claims above are debated and proven false, this is the one that seems to come up last. At this point, even the IT People realize the way to go is a rule engine. But the first thought is "He's right, we need one... We need a rule engine... We need to build a rule engine." Right.... Let's see. How about a database analogy? What you are saying is that you should build your own rule engine, the same way that you should build your own relational database management system instead of buying Oracle or SQL Server or DB2. OK. I see your point....

Well, if you're that smart, you may be better off writing your own programming language as well. VB is too slow. And Java just adds one more layer.

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